Health Care Costs and Financing

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Employer-offered health coverage affects plan uptake by workers, but has less effect on overall worker and family coverage rates

Most individuals under the age of 65 obtain health insurance through their employer. However, employers vary in the number and types of plans offered and the premium contribution required from workers. The type of health plan coverage an employer offers affects whether its employees take the insurance, but the type of coverage has a smaller effect on overall coverage rates for workers and their families because of the availability of alternative sources of coverage (such as the spouse's employer).

These findings are based on analysis of the 1996-1997 and 1998-1999 rounds of the nationally representative Community Tracking Study Household Survey. The researchers examined variation in coverage rates among those eligible for employer-sponsored health insurance. They measured the extent to which the characteristics of the health plans available to workers from their own employer affected the likelihood of enrollment in a plan offered by their employer, enrollment in an alternative source of coverage, or remaining uninsured.

The study, supported in part by the Agency for Healthcare Research and Quality (HS11668), found that when an employer offered only a plan from a health maintenance organization, married employees were 27 percent more likely to decline coverage from their employer and take up another offer, while single employees were more likely to accept the coverage offered by their employer rather than go uninsured. Higher net premiums slightly increased the odds that both married and single employees would decline the coverage offered by an employer and remain uninsured. However, after including possible insurance through a spouse's employer, the decline in coverage rates from higher net premiums was less.